It is not the strongest of the species, nor the most intelligent that survives, but one that is the most adaptable to change - Charles Darwin.
The bulls survived yet another global scare last week with the NSE Nifty closing above 5100 and the BSE Sensex reclaiming the 17,000 mark. The main indices are expected to gain further ground, at least at the start. Asian markets are trading firm this morning. The Hang Seng has rallied to surpass 20,000 while the Nikkei in Tokyo closed the first half 1.6% higher. Markets in Australia and China are shut today for public holidays.
US stocks wiped out early losses to finish higher on Friday. Markets across Europe also ended up on Friday. All in all, we could see the Nifty close in on 5200 today, though it won’t be a cake walk for the bulls. Attention will turn to today’s inflation report for May. WPI inflation stood at 9.59% in April. Progress of the monsoon and short-term liquidity crunch are among the other factors.
Intermediate uptrend remains intact but global developments will continue to drive sentiment. Wait for a fresh and substantial decline before placing large bets on stocks. The Nifty may find support at 5020 and at 4950 further down the road. On the way up, it will face resistance at 5200 and 5300.
Corporate earnings will take center-stage next month. The RBI will also hold its quarterly review at the end of July. The central bank may refrain from any aggressively tightening amid persistent concerns on the European debt crisis. One also has to see what stance the Federal Reserve takes at its meeting later this month.
India has shown great resilience in the face of external worries, but valuations are not cheap. One should be selective and defensive in the near term. One may turn aggressive once the global environment improves. Fund flows, which have tapered off lately, would be a good indicator of any change in trend.
The dollar gained against the Japanese yen but slipped against the euro and pound in Asian trading. The dollar index, which tracks the greenback against a trade-weighted basket of six major currencies, was at 86.942, down from 87.469 in North American trading late on Friday. The euro was at $1.2169, up from $1.2087 late on Friday. The shared European currency briefly rose above the $1.22 level amid short covering as the unit rose above a key stop-loss level at $1.2160.
US stocks closed higher on Friday after erasing early losses during the last hour of trade. An improvement in a closely followed gauge of consumer sentiment overshadowed a disappointing retail sales report. In the process, the Dow posted its first weekly gain in a month.
The Dow Jones Industrial Average added 39 points, or 0.4%. The index was down as much as 90 points earlier in the session, with pressure from a decline in the consumer sector and energy shares.
The S&P 500 index rose 5 points, or 0.4%, and the Nasdaq Composite gained 25 points, or 1.1%.
For the week, the Dow gained 2.8%, the S&P rose 2.5% and the Nasdaq advanced 1.1%.
The dollar rose against other major currencies on Friday. The greenback rose 0.3% on the euro and climbed 1.3% against the British pound. The dollar was 0.4% higher against the Japanese yen. The dollar index rose 0.1%.
US light crude oil for July delivery fell $1.70 to $73.78 a barrel, and gold for August delivery rose $8.00 to $1,1230.20 an ounce.
Treasury prices were higher, pushing the benchmark 10-year note's yield down to 3.23%.
US stocks rallied on Thursday, with the three major indexes rising 3%, as concerns about Europe's debt crisis eased, supporting gains in the region's shared currency. The euro climbed against the dollar to its highest level in a week, rising above $1.21.
Stocks sank at Friday's open as investor digested an unexpected 1.2% drop May retail sales as against expectations of a 0.2% increase.
But, the main indices trimmed losses following a report that showed a rise in consumer confidence. The University of Michigan's consumer sentiment index rose to 75.5 in June, up from 73.6 in May. Economists were expecting the figure to rise to 74.5.
Despite two straight days of gains, the US markets are likely to remain choppy. Investors are preferring to wait on the sidelines for the smoke to clear on European sovereign debt crisis and other factors. stability won't return until the quarter ends and earnings season begins.
A report from the Commerce Department showed that business inventories increased 0.4% in April, missing economists' expectations of a 0.5% rise.
Dell said late on Thursday it is nearing a resolution with the Securities and Exchange Commission (SEC) on a mysterious case linked to a government investigation into the computer giant launched in August 2005. The company said it has set aside $100 million for a potential fraud settlement. Shares of Dell were down 0.4%.
BP shares were 3% higher as reports said the company might defer or decrease its second-quarter dividend, due to pay out next month, as political pressure mounts over the Gulf oil spill.
Shares of Wendy's/Arby's Group jumped 4% after hedge fund manager Nelson Peltz of Trian Fund Management, the fast-food company's largest shareholder, said that an unnamed group expressed interest in acquiring the Wendy's/Arby's.
Chip stocks were relatively strong compared to the rest of the market, continuing a round of gains that began on Thursday after the Semiconductor Industry Association raised its outlook for 2010 chip sales.
Shares of Motorola rose 4% after it settled a patent dispute with BlackBerry maker Research In Motion (RIM). It agreed to a one-time payment and ongoing royalties in exchange for a halt to the litigation.
Pfizer shares rose 3.7%. Pfizer and Bristol-Myers Squibb said they stopped a clinical trial early because the data so far suggest an experimental drug for irregular heart rhythm is superior to aspirin. Bristol-Myers Squibb rose 1.8%.
American depositary shares of Banco Santander rose 6.5% after the Spanish bank's chairman said the company expects to have a similar net profit this year as in 2009, despite ongoing economic uncertainty and weakness in Spain.
Stocks in Europe closed higher on Friday, marking a third straight day of gains, buoyed by strength in Spanish banks and continued recovery in BP.
The Stoxx Europe 600 index finished up 0.4% to 249.39. Weekly gains were 2%, according to preliminary data. The benchmark index briefly fell into the red when data showed that US retail sales fell for the first time in eight months in May. The index moved higher again after figures showing improving consumer confidence in June.
German DAX index, which has been one of the better performing national indexes in Europe this year, closed 0.1% lower to 6,047.83. The UK's FTSE 100 index rose 0.6% to 5,163.68 and the French CAC-40 index climbed 1.1% to 3,555.52.
Shares in BP climbed for a second session, rising 7.2%. The oil giant could defer or cut its second-quarter dividend to help quell political uproar in the US over the oil spill in the Gulf of Mexico, The Wall Street Journal reported, citing an interview with the company's CEO Tony Hayward.
Spanish lenders advanced, with Santander rallying 6.9% and BBVA shares jumping 5.5%.
Santander's chairman said at a shareholder's meeting that the lender expects to report a 2010 net profit similar to last year's 8.9 billion euro profit and will maintain its dividend payout at 0.60 euros a share, easing worries about profit prospects.
Novartis rose 3.1% after it said that a key US committee has backed the approval of the first oral drug to treat remitting multiple sclerosis, even as questions surround the side effects of taking it.